The Next Gen iPhone 3.1 will be using the Broadcom BCM4329 wireless chip, according to Apple Insider. This chip is suppose to support advanced power saving features as well as WiFi draft n and FM receiving and transmitting, which will allow iPhone users to stream music to their car stereos.

As of now, the current iPhone 3G uses the Broadcom BCM4325, which just has an FM receiver and has been reported that Apple has locked down its functionality; currently it will only receive short-range FM transmissions from the Nike+ exercise peripheral. Hence, we wonder if Apple will do the same for the Next Gen iPhone.
The newer Broadcom BCM4329 wireless chip will support MIMO dual antenna signal boosting and will allow for better reception.

via: Next-gen iPhone getting WiFi n, FM transmitter, more? | iPhone Buzz